India is currently the third most affected country in the world. As the fifth largest economy in the world, India’s “lockdown” during the epidemic caused an economic “suspension” that lasted for three months. Although India announced on June 30, 2020 that it had entered the “Unblocking 2.0” phase and gradually relaxed control measures, it will still take time to fully “restart” economic activities.
A recent report released by the United Nations Conference on Trade and Development shows that due to the impact of the epidemic, India’s total trade loss was approximately US$348 million. Specific to each industry, the chemical products industry lost about 129 million US dollars, the textile and clothing industry lost about 64 million US dollars, the automobile industry lost about 34 million US dollars, the electronic machinery industry lost about 12 million US dollars, the leather industry lost about 13 million US dollars, and the metal industry lost about 13 million US dollars. The and metal products industry suffered losses of approximately US$27 million, and the wood products and furniture industry suffered losses of approximately US$15 million.
my country is India’s largest source of imports. The Indian economy has suffered a huge impact, which will greatly increase the risks of my country’s exports to India. In particular, the risks of the automobile manufacturing industry, photovoltaic industry, and textile and clothing industries are worthy of corporate focus. focus on.
Textile and apparel industry: risk of payment defaults has increased
A rapidly growing middle class and an increasingly powerful manufacturing industry are gradually making India the world’s largest apparel retail industry center of. However, with the development of the epidemic and the extension of the blockade period, large shopping malls and non-essential physical stores in India have been required to suspend operations. In addition, consumers’ panic about the epidemic has reduced consumption activities, resulting in a sharp decline in Indian clothing retail sales recently.
At the same time, because India’s national logistics has not yet fully recovered, and the Indian government stipulated that e-commerce companies are not allowed to sell and deliver non-essential goods during the “lockdown” period, and only necessities are allowed to be delivered, therefore, the online sales of textiles and clothing Channels also face delivery challenges. The above operating difficulties will lead to a decline in the payment ability of Indian import companies and an increase in the risk of default.
Beware of risks when exporting to India in the near future
Based on the recent changes in the situation of India’s epidemic-related control measures and the impact on related industries, here are 3 suggestions for relevant export companies.
First, in the face of new orders brought by India’s recent announcement of relaxing epidemic prevention and control measures and resuming economic activities, it is recommended that companies be cautious, try to choose high-quality, long-term customers, and treat ordinary small customers with caution Orders, and pay real-time attention to the country’s traffic and cargo transportation control conditions to avoid additional economic losses caused by a significant increase in costs caused by failure to pick up goods or delays in transportation.
Second, it is recommended that enterprises keep abreast of the financial status of their customers. Even with high-quality customers who have long-term cooperation, they should also focus on changes in their payment ability and willingness to pay, and try to use less risky methods such as letters of credit. In the payment method, try to increase the proportion of advance payment in the transaction.
Third, although India has gradually relaxed its epidemic prevention and control measures, and stores, shopping malls, etc. have gradually resumed business, due to the uncertainty of the development of the epidemic, its policies may change at any time, and prevention and control measures may also change. With the possibility of re-tightening, it is recommended that companies prepare for the risk of a rebound in the epidemic in advance. </p
